Predatory Upfront Loan Modification Fees August 21, 2008
I’m troubled by a trend that I’m seeing. Recently I’ve noticed that mortgage brokers/loan originators have become interested in learning about loss mitigation techniques. When I ask why, they say that they’re hearing there’s good money to be made doing loan modifications. What? Wait a second. I thought loan modifications were done by the lender for free.
More and more spam is popping up in my spam bin advertising loan modification services, offered by loan originators so I decided to call one of these LOs today after sending an email late last night asking for more information and receiving no reply.
This particular person goes by the title of ”mortgage planner.” On her website, she advertises a wide variety of mortgage products including the pay option ARM and the hybrid ARM (are those even available anymore?) but there’s nothing on her website about loan modifications. None of the staff bios show any experience in doing loan modifications. Here’s what I found out. The upfront fee charged to the homeowner is $3500. But the LO assures me that all the work is handled by attorneys, she says. The borrower’s up front fee is placed into escrow. If a request for loan modification is accepted by the lender for loss mitigation (statistics were offered that 93% of loans are being modified) the full fee is due. If the loan does not get modified, $2,000 is refunded and the remaining $1500 is not. I asked the LO why a homeowner wouldn’t just work directly with an attorney. She said that she works with a network of attorneys with a high loan mod approval rate and homeowners are always free to hire their own attorney and not work with her.
I asked her how much of the $3500 goes to the attorney and how much of it she gets to keep. Her response was, “why are you asking me that?” To which I replied, “because if the attorney is doing all the work, then I’m wondering how much of that fee is going to you.” She said “Well I work with the clients. I put a package together and follow up with the lender.” I said, “but a few minutes ago you mentioned that everything is handled by attorneys.” Of course at this point the conversation has turned a tad bit adversarial and she starts to probe deeper into my true intentions. My intentions are only to get closer to what’s really going on here. I need to know if this sort of gig is something that is a viable alternative for Realtors to know about when counseling homeowners in financial distress. My intentions are to be able to help other loan originators evaluate whether receiving a referral fee on a loan modification is going to get them into trouble. If I were to guess, I’d say that the LO earned $2,000 for a successful loan mod and the remaining $1500 went to the attorney. There are forums out there confirming my guess.
In some states, including Washington State, Mortgage Brokers and their LOs now owe fiduciary duties to consumers. Fiduciary comes from the Latin word fiducia, meaning “trust.” A fiduciary is a person who has the power and obligation to act for another under circumstances that require complete trust, good faith and honesty. Fiduciaries are obligated to avoid self-dealing and conflicts of interests in which the real or potential benefit to the fiduciary is in conflict with the best interests of his or her client. All fees earned must be disclosed to the consumer. The fact that this mortgage planner/LO felt uncomfortable discussing his portion of the $3500 and the actual work performed is a big red flag.
We must realize that not every homeowner is going to be as aggressive as I am with LOs over the phone.
Consumers reading this blog:
Loan modifications are performed by a lender with no fee to the homeowner. HUD-approved Housing Counseling Agencies perform loss mitigation/loan modification services for free. These agencies are supported by our tax dollars.
I suppose the argument is this: “Well the loan servicing departments are really busy and by paying our $3500 fee, you have a 93% chance of getting your loan modified.” But doesn’t the homeowner still have that same 93% chance going at it alone or with the help of a housing counselor?
If I had $3500 to spend, then I think I’d rather spend the whole $3500 on legal counsel, instead of just $1500.
Loan originators, a fee for services rendered is fine, but what are those services being performed? This particular person shows zero experience in loan modifications and admitted to me that the attorneys are doing all the work. Is “gathering papers together” worth $2,000? A fee earned that is not commesurate with services rendered has been catagorized as an illegal kickback via RESPA’s Section 8. Loan Servicing companies are also subject to the provisions of RESPA. All lenders are subject to RESPA whether or not the LO owes fiduciary duties to consumers. Any amount over what’s considered normal and customary for services rendered is considered a junk fee and subject to challenge.
Sigh. I suppose we need to consider that we’re coming out of a mortgage orgy where LOs actually did just gather together some papers, threw them on the processor’s desk, and picked up a fat paycheck. Why wouldn’t they believe this could be their ticket back to the good old days?
Loan Originators, before you begin earning these referral fees for basically doing jack squat and handing the file over to an attorney, consider what would happen if the homeowner did not feel that he or she was well served.
Your regulator ends up with a phone call, which turns into an investigation. Perhaps you’ll end up having to refund all those fees back to the consumer. It could happen.
Loan originators, my advice is to refer your financially distressed homeowners to legal counsel and free HUD counselors. Loan modifications are performed free of charge by lenders.
As a fiduciary, is it possible to justify charging anything above zero when you know free services are available for your client?
Okay all you banker types. Help me analyze this trend. If banks/servicers are offering upwards of $3500 to outsource loss mit/loan mods, that can mean several things. It surely means that a large percentage of these people who are receiving a temporary interest rate freeze on their ARMs will be back in 3 to 5 years with their hand out again, asking for another loan mod; IF they even make it that far. 40% of recent loan mods have already re-defaulted. Random, desperate loan mods without common sense underwriting means we’re just pushing this whole mess further down the road, delaying the eventual recover until many years into the future.
Apparently one of these companies is coming to town next week to sell this system to a room full of LOs. They’re charging LOs a pretty hefty set-up and monthly fee to participate in their referral program. Someone is definitely getting rich quick off of desperate LOs.
Deceptive Advertising Update: Linden Home Loans, Paramount Equity and Assurity Financial August 10, 2008
Linden Home Loans received a “Statement of Charges“ back in Dec of 2007 for a deceptive television and radio ad. The Department of Financial Institutions discovered that Linden promised consumers residential mortgage loans at “1% interest, with no points and no fees,” yet no one ever received those loan terms in 2006. DFI reviewed 91 files that were originated during the time the ads aired. Only 10 of these borrowers received a 1% mortgage and those who did, paid $10,000 in fees.
With all the talk about Paramount Equity being nailed by DFI with a “Statement of Charges” for their deceptive radio ads, I thought I’d check to see what else DFI has been up to. In past several months, we’ve heard from DFI’s administrators that we should expect to see DFI step up enforcement in the area of deceptive advertising. Paramount Equity’s radio ads are still running in the Seattle area.
After a “Statement of Charges” is issued, mortgage brokers have a chance to appear at a hearing with legal counsel and a prepared defense. In Linden’s case, legal counsel apparently advised them to negotiate a settlement. In the final Consent Order, Linden admits no wrongdoing, must immediately pay a $75,000. fine and their WA State mortgage broker license has been suspended for 30 days. DFI retains the ability to further penalize Linden if they do not make good on that $75K. The initial fine was set at $150K. The attorney general’s office is reporting that Linden voluntarily surrendered their mortgage broker license.
Also due to deceptive advertising, Assurity Financial has had their state consumer loan license revoked and the owners have been banned from doing business under the Consumer Loan Act or Mortgage Broker Practices Act for 5 years. Correction: Assurity gets to keep its license and its managing members are not barred from the industry for any period of time. On page 2 of the Consent Order, paragraph D the license revocation is stayed for a period of 24 months. This means that Assurity’s license remains in full force and effect and it will be revoked only if Washington DFI seeks to revoke the license for a violation of the Consent Order. Here’s a link to their website, which describes Assurity as a trusted mortgage advisor.
What’s your take on what will happen to Paramount Equity?
Why do banks take so long to approve a short sale? August 4, 2008
This question comes up over and over again from Realtors, homeowners and homebuyers everywhere I go. A one sentence answer doesn’t exist for this question. If you truly want to know the answer to the question, “why” continue reading. This means you will have to take a step back from your particular emotional situation enough to really listen to what’s being said because everyone wants their deal approved NOW.
Banks are under no obligation to approve your short sale. I know what you’re thinking, reader. You’re thinking, “Well if the G.D. bank would just approve my short sale faster, they wouldn’t be losing so much money!”
Let’s start at the beginning. A homeowner is said to be in a short sale situation when he or she owes more than what the home is currently worth, is in default and must sell. Traditionally, homeowners agreed to pay back the difference between what was owed and the sales price. The short sale seller signed a new, unsecured note at closing and promised to pay back the difference in regular monthly installments. The only cases where the debt was “forgiven” was for true financial hardship cases where there was absolutely no way the homeowner could ever repay the difference. An example would be the untimely death of one of the breadwinners. But that was then.
In today’s politically charged, loan modifications for all, HoHo, let’s-dump-everything-into-FHA environment, homeowners in a short sale situation today are receiving debt forgivness and even temporary tax exemptions on top of that. Don’t worry, the rest of us tax payers will pick that up for you.
The first step in figuring out why your short sale is taking so long to be approved is to inquire about whether the homeowner is asking the bank to forgive the difference or if the homeowner is gainfully employed and able to pay back the difference. This all must be proven and documented to the lender’s satisfaction. If the homeowner is asking for debt forgiveness, the short sale will take longer to approve if the bank does not have all the required documentation.
Thought question: Why would any lender approve a short sale, especially one that requires debt forgiveness, unless there is proof that foreclosure is imminent? Answer: They won’t. Lenders have to weigh the costs associated with the short sale proposal against the cost of foreclosure. If a homeowner has not yet defaulted on their loan, the bank has little motivation to approve the short sale. Why not wait for a better offer to come along? (Note, homeowners reading this article should always consult with an attorney if you are selling short, in default, or will be in default on your mortgage loan(s).)
All loan servicing departments have processes in place for dealing with short sale approvals. They may not have fancy computer systems so that everything is automated but maybe that’s a good thing. Look where automated underwriting got us.
Next step: Homeowners must prove that they do not have the money to make up the shortfall. This means sending in copies of all bank statements, tax returns, w-2s, and other supporting documents to verify that the homeowners is financially insolvent. Short sales are reserved for people with NO MONEY.
Gentle reminder: The new sale must be an arms-length transaction. Another common problem that lenders must watch for is when the real estate agent on the transaction happens to be the “assigned” buyer on the purchase and sales agreement. The lender is not going to be thrilled in paying a real estate commission on that kind of transaction. Further, there are plenty of foreclosure rescue scams happening nationwide. Lenders scrutinize short sale offers to look for signs of fraud. Tanta reminds us:
Is it the job of the Loss Mitigation Department to care about clearing your local RE market? No. Is it their job to care about keeping your buyer wiggling on the hook long enough to get papers signed? No. Is a short sale supposed to be a painless alternative to foreclosure for anyone involved? No. There are no painless alternatives. There shouldn’t be. There cannot be.
Next, everyone who is patiently waiting for the bank to approve the short sale must now realize that once the bank says “okay” to the short sale, there very may be a long list of investors who own pieces of this mortgage loan. Each and every investor will have to give their approval for the short sale. We enjoyed many years of growth in the real estate industry and the overall economy thanks to the invention of Residential Mortgage Backed Securities. RMBS made millions of dollars for many people. The downside to securitizing mortgage loans and then selling off slices of each mortgage to different investors is that when it comes time to tell the investor “you’re going to have to take a haircut” that investor gets to have a say in the matter.
Calling loan servicing and yelling at them over the phone will get you nowhere.
I would like to be first to predict that the next meltdown will be loan servicing. But perhaps my prediction is so obvious as to not be much of a prediction at all. How much longer can they sustain this level of stress and pressure, with their current staffing levels, while the banks are facing enormous losses? Of course when that meltdown happens, I predict our government will step in and mandate harsher regulations on servicers, which will be passed on to the consumer in the form of higher interest rates.
Loan servicing use to offer what it said: “service.” It was treated as a cost center on a bank’s balance sheet. Over the past 15 years, servicing became a “profit center” and the highest expense, namely labor, was cut to achieve profit goals. This is one more lesson in underpricing. The cost of “good” loan servicing in which phones are answered and files processed smoothly, would have cost us all way, way, way more on the retail end, than what we paid.
Let’s say we could create instant loss mitigation nirvana today. All phones are answered on the first ring, all short sales are approved with no questions asked, no documentation required, no proof of hardship necessary, no proof of financial insolvency needed, and all Realtors receive their full 6% commission.
The consequences of not performing due diligence at the loss mit stage are disaster for all of us. Compare this to the current nirvana we just left behind: A world where anyone could get a mortgage loan with no verification of ability to repay, with massive fraud still being uncovered. We need to do it right this time, and it takes TIME to do proper short sale loss mitigation.
Housing Market Predictions from RE Connect July 31, 2008
To follow up from last week’s Inman Connect, here are the answers from panelists to the question, “When will the housing market recover?”
Noah Rosenblatt, Founder of Urbandigs
Severe and deep recession, housing may bottom at the end of 2009 with recovery in 2011.
Dottie Herman, President, Prudential Douglas Elliman
We’ll hit bottom in the first quarter of 2009, after the election and stay flat for a few years.
Avram Goldman, President and CEO of Pacific Union GMAC Real Estate
We’re in a recession now. Some markets will do fine and go up, some markets will be down a long time.
Yves Smith, NakedCapitalism
I wish I could say 2010. The Alt-A ARM resets bother me because they will peak in 2011. Market will bottom in 2010 and stay flat for a long time.
John Williams, Economist; Shadowstats.com
We’ll have an L shaped decline, hyperinflation, and a great depression.
CR, CalculatedRisk
Foreclosures are moving upstream. Notice of defaults will rise in the mid and higher price ranges. They’ll never reach the foreclosure levels of the subprime loans, but foreclosures in the mid and higher price ranges will rise. Wonders if our government is out of tricks; the new housing bill doesn’t do much, but we have to have confidence in our GSEs. Different areas will bottom out at different times: 2010 to 2012.
Same question, two days later, different panel. Here are their answers:
Alex Perriello, CEO Realogy
We’ll have a sloppy, rocky, bumpy bottom. It’s not pretty where we are today. Inventory is key. We can support 4.6 to 4.8 million sales nationwide. The last time inventory was this high (nationwide it is 11 months) was in 1986. Inventory drives price. Realtors should datamine their clients who bought 2002 and prior: Sell them a new home! Market to renters! Alex says it’s too early to call the bottom.
Joel Singer, EVP, California Assoc of Realtors
Prices are exploding downward in CA. Worried that if anything happens to the GSEs all bets are off. There’s a lot of wild cards in the financial sector. Cali seems to have hit a bottom but this may be a false bottom.
Patrick Stone, Chairman, The Stone Group
What hasn’t been fully communicated is that price stability has been achieved in a third of the country. In the next six months, we’ll see another third achieve it. The last third will achieve price stability in “probably one year” unless we have a cataclysmic event where the impact on our economy could be severe. The stability of our financial system is paramount to finding the bottom.
Jonathan Miller, Co-Founder, Miller Samuel, inc.
It’s very challenging for appraisers to come up with a value when there’s a lower pace of sales. Until progress is made with the credit markets, it is too soon to talk about the bottom. To call a bottom is not professional. We can’t do it.
The Housing Crisis is Like Hurricane Katrina July 23, 2008
There were four back-to-back panel sessions on the topic of Foreclosures at Real Estate Connect this morning. Here are some sound bites and quotes.
There are 25,000 homes per MONTH in California that are going back to the lender. This is going to create a glut of housing inventory for many months into the forseeable future. The percentage of loan modifications that are re-defaulting and going into foreclosure is high. Estimates are 40% or higher.
In Cali, the very low end price range REO homes are now selling to long term investors who are are able to put a renter in that house and make their cash flow goals.
There are an estimated 400,000 people living in their homes for free in California right now. Lenders are stalling the foreclosure process because there simply is not enough people working in the loss mitigation departments to process all the paperwork.
There is a huge problem nationwide with listing agents who are taking short sale listings and have no clue on how to help the homeowner navigate through the short sale process.
Quote: “This [the housing crisis] is like Hurricane Katrina.”
Question to the panelists: How can consumers who are facing foreclosure help themselves?
Answer from Frances Flynn Thorsen, “Stay away from Realtors.”
Jillayne here. That answer brought forth many laughs and suprised blurts of shock. I personally think this took quite a lot of moxie to say in a room filled with Realtors. The point Frances was trying to make was that not all homeowners who are in default want to sell their home! When real estate agents stick with only a single mindset that selling is the ONLY option, they are doing a grave disservice to their clients. Frances said it is imperative that agents connect homeowners with either Acorn or NACA or some other HUD-approved Housing Counseling Agency that can effectively negotiate with the lender, and to make sure the homeowner receives legal counsel from attorneys who specialize in consumer protection law, which is something they can find at NACA.
There are very few loan modifications being granted if the homeowner is seriously underwater. The example given was $2,000 in monthly income and $11,000 in monthly debts. No loan mod for that consumer because the chances of re-defaulting are way too high. This homeowner may be better served through the foreclosure process.
The loan modifications that are granted are often done by lowering the interest rate on the note to say, 3% for a fixed period of time such as three years, but with NO principal reduction.
Jillayne again. I say this practice may lead to a build up of shadow inventory that could end up hitting the market in 2011 and further drawing out the housing recession into 2012.
Short sales in Florida are a complete waste of time. Buyers in Florida are looking at sellers with equity or REOs ONLY. Banks are only now starting to dump their REOs by lowering the prices in order to get them off their boooks.
Florida should WISH FOR another Florida bank failure because then the other banks will become extremely nervous about the bank regulators poking around and will begin to get real with dropping the prices on REOs in order to clear out their inventory, especially the closer we get to the end of a quarter.
“Real estate agents have a moral and fiduciary duty to our clients. We have a duty to try and maintain values. We should be encouraging sellers to help hold the value by offering to “buy down” the interest rate instead of lowering the sales price.”
Jillayne here again. That quote came from LJ Jennings, a real estate broker/owner. I’m not so sure that holding prices artificially high could pass a fiduciary test. This may NOT be in the client’s best interest.
VERY interesting insight from a data analyst. She said some companies would rather stick with data that their analysts have been using INSTEAD OF showing NEW data to their end users….because then their existing analysts would be proven wrong and the company doesn’t want to deal with that.
Take aways:
- Banks will begin to ”throttle out” their inventory quarter to quarter,
- A lot more big pools of scratch and dent (loans with problems) loans will start to be sold off in bulk to investors
- Lenders will slow down the default process for due diligence and accounting reasons
- In the second have of 2008, 100 billion (correction: dollars) in loans will reset. If ONLY 13% default, this is a huge number of homes that will impact inventory levels for the years to follow.
- Hundreds of thousands of Alt A loans will reset in 2009.
- Foreclosure relief bill is a little too late. Our problem right now is that lenders are afraid to lend on a declining asset and buyers are afraid to buy. The bill does more to shore up confidence in Fannie and Freddie than anything else.
- There ARE options for a homeowner in default who does not want to sell.
- Foreclosure is only a temporary part of a person’s life. Life goes on.
- Loan modifications and short sales are being done faster through banks that have a history of predatory lending (this is a concept I’ve been teaching for 8 years now.)
I have an entire set of notes from the attorney who spoke on the liability issues agents face when listing REO homes. I’ll have to do a separate blog article on that for you.
Reporting from ConnectSF08 July 22, 2008
I’m here at the beautiful Palace Hotel in San Francisco for the Real Estate Connect conference put on by Inman News. I’ve been to Connect conferences in the past and came away with some fond memories of presentations by Larry Page and John Seely Brown. I’m sure my raincityguide blogger colleagues are here someplace; by this time of night I’ll guess they’re out drinking and I’ll hook up with them tomorrow. There are two tracks to choose from tomorrow morning, blogging and foreclosures. Guess which one I signed up for? Tomorrow afternoon, Brad Inman delivers the opening keynote “How the Nomadic Culture Will Rock Your World” and right after that, we’ll here from Craig Newmark and RCG’s Dustin Luther and THEN finally, “The Housing Debate: Bull v. Bear” panel with two of my favorite bloggers, CR from CalculatedRisk and Yves Smith from Naked Capitalism. It doesn’t look like all the meals are covered so if anyone who knows San Francisco has suggestions for where to step out for a quick bite, please let me know. I’m across the street from the Mongtomery Street BART station and I am armed with a four day BART pass.
The First in a Series of Fannie and Freddie Bailouts July 13, 2008
The rumors floated on Friday regarding Fannie and Freddie turned out to be true. This first bailout proposal, released a few hours ago, has three parts. I say “first” because there is no way that this is going to be enough to save what’s headed our way nor will this be the only time the government will need to ”bailout” F&F.
The U.S. Treasury plans to seek approval for a temporary increase in the line of credit granted to Fannie Mae and Freddie Mac. They will also seek authority to buy equity in either company, and the Federal Reserve voted to allow the New York Fed to loan F&F money, if needed, giving F&F access to the Federal Reserve’s discount window.
The Wall Street Journal says the U.S. Treasury and The Federal Reserve are doing this mainly to boost confidence in F&F, not necessarily because any of this is needed, which to me seems to be a flat out lie.
The weekend move means that Fed Chairman Ben Bernanke, who has been steadily accumulating authority as the U.S. grapples with the financial crisis, will have even more power. The Treasury envisions the Fed working with the mortgage giants’ regulator to help prevent situations that could be a risk for the entire financial system. The move builds on Treasury’s broader goal of remaking financial regulation to give the Fed broader influence over financial-market stability.
I’m not sure if we’re suppose to be happy or scared at the thought of Ben Bernanke accumulating more power. Maybe what’s really going on is some preemptive planning due to known or unknown possibilities that tomorrow’s auction of Freddie Mac debt doesn’t go well.
The Sunday move was designed in part to head off fears about Monday’s auction of Freddie Mac notes. While small, the planned sale had assumed an outsized importance as a test of investor confidence. Freddie should be able to find buyers for its three- and six-month notes, market analysts said. But there is a chance that some financial institutions and investors may demand higher-then-usual yields.
Similar Freddie and Fannie notes that are currently outstanding yield around 2.5%. If weak demand for Freddie’s auction leads to sharply higher yields on the new notes, that could trigger a selloff across a wide range of debt issued by the companies, some analysts said. But most said such a scenario is unlikely.
I’ve been glued to the web, the radio, and my phone since Friday evening reading, listening, and talking about this with friends and colleagues. If the federal government choses to provide (the implied) government backing for bondholders, then the United States increases our national debt by 5 trillion dollars which would have a profoundly negative impact on the value of the dollar and potentially bankrupting the U. S. economy. If the federal government chooses to do nothing and F&F are forced to mark their portfolio closer to market value and sell off assets to accumulate capital, then the true value of what’s in the bag becomes known. The secret will be out and now nobody will be interested in buying our Residential Mortgage Backed Securities, the market will know the true value of the loans currently being held by banks all over the U.S., mortgage lending slows way down, interest rates go way up, and the housing market goes cliff diving.
It seems to me that with this first bailout proposal (I am preparing for more bailouts as should you) everything is just going to be delayed as long as possible, taking us down further into a deeper recession step-by-step.
This bailout proposal is not enough. We have only just begun to see foreclosures rise. We still have the rest of 2008 to get through, when another round of pay option ARMS originated in 2006 begins to adjust, and through 2009 when the ARMs originated in 2007 adjust. Defaults and foreclosures are far from over.
There was a guy who predicted the demise of Fannie and Freddie back in 2006. His proposal is that we nationalize Fannie and Freddie, quit pretending that they’re a private company, and restructure the debt, thereby forcing the bondholders to take a haircut.
Sniglet asks an interesting question (comment 123): “So what happens to the shareholders? Do any of these plans ensure that there is no dilution of equity if any form of bail-out were to occur? If the GSE shareholders aren’t protected then we could see a complete abandonment of the financial system by investors. Who will want to buy shares in financial firms if the government isn’t going to ensure their investments remain safe?”
From everything I’ve read over the weekend, the government likely will not protect shareholder equity. Whether or not they should is up for debate.
One more story for the Bellevue mortgage fraud files July 11, 2008
The Seattle Times is reporting tonight that a federal indictment has been issued for a Bellevue loan officer and his assistant.
A former loan officer at a Bellevue mortgage company and his assistant have been indicted on a charge of conspiracy to commit wire fraud in a scheme that prosecutors say involved using straw buyers to purchase dozens of homes at inflated prices and siphoning off the extra cash for their own use.
Christopher Brooks and Amani Moss allegedly obtained more than $27 million in fraudulent loans for the purchase of at least 54 homes beginning in 2005, according to an indictment unsealed this morning.
The charges allege that they recruited straw buyers, who would allow the men to falsify loan papers for them. At the same time, Brooks and Moss would use a realtor, who is identified in the indictment by the initials “L.A.,” to find home sellers who were willing to overstate the purchase price of their homes. The straw buyers were paid between $7,000 and $10,000 for each transaction, the indictment says.
Brooks, who worked for America Mortgage in Bellevue, would then prepare and submit the false loan papers to several lenders in the area, according to court papers.
The difference between the inflated price and the actual purchase price of the home ranged from $30,000 to $778,000 per home, and the charges allege that money was funneled through a business owned by Moss, Peachtree Development, and into their pockets..
Home sellers, if your home is not selling and someone from our industry approaches you with an idea to take your home off the market and relist at a much, much higher price, please turn the person in to his or her regulator. If you are not sure who the regulator is, contact one of us and we can point you in the right direction.
The DFI Licensee database shows America Mortgage in Bellevue as a licensed mortgage broker. I wonder how many of these loans went into early payment default and how many the broker was asked to buy back from the lender.
In order to commit fraud at this level, the Realtor and mortgage broker would have had some help from an appraiser as well as an escrow closer.
Indymac Bank Taken Over by the FDIC
The second largest bank failure in the history of the U.S. means about 1 billion in lost deposits held by 10,000 customers as reported by CNN Money. Accordingly, the Indymac website has a new look. The LA Times has pictures of customers lining up outside the bank, looking inside and here’s a picture of employees loading up their car with brown cardboard boxes.
Just before their demise, Indymac was offering high rates for their Certificates of Deposit. The LA Times asks an interesting question: “Should a money-losing financial institution be permitted to pay well-above-market deposit rates under the protective umbrella of federal deposit insurance? For a six-month CD with a $5,000 minimum deposit, IndyMac’s website [on Wednesday, July 9th] was offering an annualized yield of 4.1% as an online “special.”
I wonder what will happen to the severance packages offered to the 3800 workers who lost their job this past Monday?
I wonder which banks (federal or state chartered) are offering high, high rates on deposits today?
Stewart Title in Everett on fire June 25, 2008
I just received a call from Mark Perez who works at Stewart Title in King County telling me that Northwest Cable News is showing film footage of a fire in progress at Stewart Title’s Snohomish County main office in Everett.
If you recall it was less than a year ago that Stewart Title Everett received a two million dollar fine by the state Insurance Commissioner for violating provisions of state law governing title insurance companies.
Update: Here are some links to follow up stories on the fire:
Seattle Times says ATF is investigating
KIRO TV reports that ATF says the fire does not look suspicious. video
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